The European
Securities and Markets Authority (ESMA) has published a peer review of the supervisory practices EEA national
competent authorities (NCAs) apply in enforcing the requirements of the Market
Abuse Directive (MAD). The Directive
deals with the prevention of the dissemination of misleading information, the breach
of reporting obligations and market abuse.

ESMA begins preparatory work for new Market Abuse Regime
The European Securities and Markets Authority (ESMA) has published a Discussion Paper setting out its initial views on the implementing measures it will have to develop for the new Market Abuse Regulation (MAR).
MAR aims to enhance market integrity and investor protection. It will achieve this by updating and strengthening the existing market abuse framework, by extending its scope to new markets and trading strategies, and by introducing new requirements.
The Discussion Paper presents positions and regulatory options on those issues where ESMA will have to develop MAR implementing measures, likely to include Regulatory Technical Standards, Delegated Acts and Guidelines. These implementing measures are of fundamental importance to the new regime, as they set out how MAR’s enlarged scope is to be implemented in practice by market participants, trading platforms, investors, issuers and persons related to financial markets.
In developing these regulatory options ESMA, where similar requirements already exist under the current Market Abuse Directive (MAD), has taken into consideration the existing MAD Level 2 texts and ESMA/CESR guidelines to set out the DP positions in light of the extended scope of MAR.
This Discussion Paper is based on the version of the MAR Level 1 text agreed by the European Parliament, the Council and the European Commission on 24 June 2013.
The closing date for responses is Monday 27 January 2014.
MAR Policy Areas
The DP covers ten sections of MAR where ESMA is expected to have to provide input, these include:
• conditions to be met by buyback programmes and stabilization measures to benefit from the exemption from market abuse prohibitions;
• arrangement and procedures required for market soundings, from the perspective of both the sounding and the sounded market participants;
• indicators and signals of market manipulation;
• criteria to establish Accepted Market Practices;
• arrangement, systems and procedures to put in place for the purpose of suspicious transactions and order reporting as well as its content and format;
• issues relating to public disclosure of inside information and the conditions for delay;
• format for insider lists;
• issues concerning the reporting and public disclosure of managers’ transactions;
• arrangements for fair presentation and disclosure of conflicts of interests by producers and disseminators of investment recommendations;
• reporting of violations and related procedures.
Next steps
ESMA will consider the feedback it receives to this consultation in Q1 2014 and incorporate it in to its full consultation papers on both its draft Technical Standards and Technical Advice to the Commission. The dates for these consultations are will depend on the publication of the final version of MAR.
Notes for editors
1. 2013/1649 Discussion Paper - ESMA’s policy orientations on possible implementing measures under the Market Abuse Regulation
2. Proposal for a Regulation of the European Parliament and of the Council on insider dealing and market manipulation (market abuse) (MAR)
3. ESMA is an independent EU Authority that was established on 1 January 2011 and works closely with the other European Supervisory Authorities responsible for banking (EBA), and insurance and occupational pensions (EIOPA), and the European Systemic Risk Board (ESRB).
4. ESMA’s mission is to enhance the protection of investors and promote stable and well-functioning financial markets in the European Union (EU). As an independent institution, ESMA achieves this aim by building a single rule book for EU financial markets and ensuring its consistent application across the EU. ESMA contributes to the regulation of financial services firms with a pan-European reach, either through direct supervision or through the active co-ordination of national supervisory activity.
Press Release 2013/1650
Discussion Paper 2013/1649

The European Securities and Markets Authority (ESMA) has today published a Discussion Paper (DP) regarding the technical implementation of the incoming Benchmarks Regulation (BR). ESMA is seeking stakeholder’s input to inform its future proposals on draft Regulatory Technical Standards (RTS) and Technical Advice (TA) to the European Commission.

Benchmarks are used in financial markets as a reference to price financial instruments and to measure performance of investment funds, as well as being an important element of many financial contracts and their integrity is critical to financial markets and to investors in particular. The BR’s objective is to improve the governance and control over the benchmark process, thereby ensuring their reliability and protecting users. The changes aim to:

improve the quality of the input data and methodologies used by benchmark administrators;

ensure that benchmark contributors provide adequate data and are subject to proper controls; and

ensure the supervision and viability of critical benchmarks.

Steven Maijoor, ESMA Chair, said:

“The Benchmark Regulation, once implemented, will ensure the accuracy, robustness and integrity of benchmarks and the benchmark setting process by clarifying the behaviours and standards expected of administrators and contributors. These requirements will ensure that benchmarks are produced in a transparent and reliable manner and so contribute to well-functioning and stable markets, and investor protection.

“ESMA, in preparing for its work on regulatory technical standards and technical advice, is keen to ensure that all affected stakeholders have their views heard on this important topic and we hope that all interested parties will take this opportunity to contribute.”

The DP is seeking stakeholder’s feedback in the following areas:

definition of benchmarks;

requirements for the benchmark oversight function;

requirements for the benchmark input data;

governance and control requirements for supervised benchmark contributors;

authorisation and registration of an administrator; and

transparency requirements regarding the benchmark methodology.

The exact date when the Benchmarks Regulation will enter into force is still unknown as it has not yet been published in the Official Journal of the EU.

Next steps

ESMA will hold an open hearing on the DP on 29 February 2016 in Paris. It will use the responses to its DP to develop detailed implementing measures on which it will publish a follow-up consultation in Q3 2016.